Regardless of whether they make or buy the part jdi will


JDI, Inc. is trying to decide whether to make or buy a part (#J-45FPT). Purchasing the part would cost $1.50 each. If they design and produce it themselves, it will result in a per unit cost of $1.00. However, the design investment would be $50,000. Further, they realize that for this type of part, there is a 25% chance that the part will need to be redesigned at an additional cost of $50,000. Regardless of whether they make or buy the part, JDI will need 150,000 of these parts. Using decision trees analysis and EMV, what should JDI do? Show the decision tree.

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Operation Management: Regardless of whether they make or buy the part jdi will
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